TXCO Resources needs a white knight

TXCO, the San Antonio-based oil and gas exploration and production company, has a lot of valuable acreage and has been working to improve its cash position for several months. But so far, it doesn’t have any acceptable offers from companies wanting to buy its acreage or partner with it.

TXCO last week laid off its CFO and chief operating officer, an action “that suggests the company is actively preparing for Chapter 11,” senior analyst Chris Pikul of Morgan, Keegan & Co. in Denver said in a note to clients.

“Under the protective shroud of Chapter 11, in theory, a more competitive bidding process may generate fair value” for the company’s most valuable acreage, Pikul said.

But Pikul and his company are dropping research coverage of TXCO, saying “the company will likely cease to become a public filer.”